Prime Minister Gruevski points to early debt repayment as proof of economic stability

Macedonian Prime Minister Nikola Gruevski said that the early repayment of Macedonia's loan from the International Monetary Fund is an indicator of economic stability and that this is the second time the country has repaid a substantial debt ahead of time in his term. This, Gruevski added, brought the debt to gross domestic product ratio just below 35 percent, making Macedonia's debt one of the lowest in Europe.

"Back in 2007 and 2008 we also made a serious step toward early debt repayment. Then we were strongly criticised by the opposition, but this time we see how keep quiet and are nowhere to be found. During that first debt repayment, the opposition told us that it's not a smart move, but we saw that the lower debt level helped us immensely to weather the subsequent global economic and financial crisis. Now we make a similar move that will bring the debt to GDP level at 34,9 percent, which is one of the lowest levels in Europe. We repaid 174 million USD we owed to the International Monetary Fund, which now concludes this obligation", Prime Minister Gruevski said.

The Prime Minister added that the state Treasury is also repaying its loans to private banks, making the repaid funds available to stimulate the domestic economy through new credit lines. "This is the best answer we can give to the question whether Macedonia has a stable macro-economic situation, whether our budget is stable, and whether we are experiencing any problems in this regard. When you pay back your loans ahead of time, and you don't issue new loans, that is the best answer", Gruevski said.

IMF Managing director Christine Lagarde issued a press release on Monday, saying that "the decision to repay early its outstanding obligations to the Fund reflects the country’s improved access to international capital markets. We look forward to continuing a close and constructive dialogue with the Macedonian authorities". The precautionary liquidity line was given to Macedonia in January 2011, and its last rate was due in a year from now.

Macedonian Parliament is also discussing a Constitutional amendment that will permanently fix the debt to GDP ratio below 60 percent, and the annual deficit below 3 percent of GDP. The comments Prime Minister Gruevski made, at a press conference on the new plan to help hiring of children without parents, come after opposition SDSM leader Zoran Zaev accused the budget of being in shambles. Zaev played an audio recording, part of a cache he claims he got from insiders in the Macedonian intelligence service, allegedly showing Deputy Prime Minister and Finance Minister Zoran Stavreski being critical of levels of budgetary receipts and needless spending on cultural promotion. On Monday Stavreski also had a press conference, to say that Macedonia maintains low deficit and debt levels and is experiencing solid growth of both the economy and foreign investment.